Dangerous criminals including a domestic abuser who posed a risk to children have been freed from jail early as part of a Government bid to cut overcrowding, a watchdog has warned.

Chief inspector of prisons Charlie Taylor raised “serious concerns” about the policy as he highlighted examples of high-risk inmates selected for early release.

First announced last year, the Government insisted the measure would be temporary and would only allow “low-level offenders” out of prison up to 18 days early under strict supervision.

But earlier this month Mr Taylor described the prison system as “creaking at every level” as it emerged ministers were preparing to extend the scheme for a second time so some criminals could be freed from jail up to 70 days before their release date.

In a report published on Tuesday, Mr Taylor said a “high-risk” inmate at HMP Lewes, who posed a danger to children, had his release date brought forward despite “having a history of stalking, domestic abuse and being subject to a restraining order”.

Another inmate who had been released early was recalled to custody before the watchdog’s inspection had ended. According to the findings, he had a “significant” drug problem and a record of self-harm as well as experiencing suicidal thoughts, but was freed despite “appeals for the decision to be reversed and staff having serious concerns for his and the public’s safety”.

He was homeless on release, according to the findings.

The watchdog’s concerns came to light in findings from an inspection at the East Sussex jail carried out in February, shortly after the scheme was brought into force. Inspectors uncovered major problems with drugs, violence and self-harm at the category B Victorian prison, the report said.

Mr Taylor found the way the policy was being put into action was “undermining” safe releases of prisoners.

Release dates for some high-risk prisoners had been “brought forward at short notice, forcing already stretched resettlement agencies to redraw existing plans from scratch in as little as two or three weeks”, according to the report.

The need to release offenders early to free up space in jails is another sign of the pressure prisons are under, Mr Taylor said as he branded the situation “entirely predictable” and “simply not sustainable”.

“Although some of these issues may, I hope, reduce as the scheme embeds, more fundamentally, an urgent conversation is needed about who we send to prison, for how long, and what we want to happen during their time inside,” he added.

Labour’s shadow justice secretary Shabana Mahmood accused the Government of a “cover-up” over its early release scheme and said: “The public will rightly be worried to hear of cases where violent prisoners are being released without a proper assessment of the risk they pose to the public, and specifically children.

“It’s being left to prison inspectors to tell the public the truth because this Government is refusing to level with them on the scale of the prisons and probation crisis.”

Justice Secretary Alex Chalk previously came under fire amid accusations of a lack of transparency about the plans.

Andrea Coomber, chief executive of charity the Howard League for Penal Reform, said: “It is imperative that the Government publishes data on the early release scheme’s operation and makes a commitment to transparency as a matter of urgency.

“While action to ease pressure on jails is necessary, this temporary measure is no substitute for what is really needed: a more sensible response to crime that puts fewer people behind bars and more money into services that can help them.”

Justice minister Laura Farris defended the plans under questioning from MPs in the Commons on Tuesday.

Labour’s shadow justice minister Kevin Brennan said victims “should have the right to know who this Government is letting out of jail early” and asked: “With today’s news that – despite ministers’ protestations to the contrary from that despatch box – high-risk offenders have been released early, why should the public have any confidence that this is a Government which puts victims first?”

Ms Farris replied: “Under our scheme, no sexual offender, no terrorist offender, nobody who has been convicted of serious violent crime or been convicted for four years or more will be eligible for release.”

A Ministry of Justice spokesman said: “While we will always ensure there is enough capacity to keep dangerous offenders behind bars, this scheme allows us to ease short-term pressures on prisons by moving some lower-level offenders at the end of their custodial term on to licence.

“These offenders will continue to be supervised under strict conditions such as tagging and curfews, and the prison service can block the earlier release of any individual who poses a heightened risk.”